Day 1 – Session 4

DF Approaches, Methods &

Techniques
Core Attributes of Forecast
• More than often, they are not accurate!!!
• A forecast is a likelihood, not definite occurrence
• A good forecast should be together with tolerance parameters
to appreciate level of reliability
• Aggregated forecasts are usually more accurate
• Accuracy of forecasts deteriorate with longer period of time
• Range of forecasts should be produced, using different
methods, to establish most likely
• Quality of data very critical to quality of forecast

Slide 2
 Demand Forecasting Approaches (Refresh)

• Top – down: The peak demand at system level is

estimated and then broken down to region, substation,
feeder, sector and customer class.
• Bottom – up: The peak demands by customer classes
are aggregated to sector, feeder, substation, region and
system levels.
• Often a combination gives better results

Slide 3
Demand Forecasting: Top Down (Refresh)

System NTDC

Region DISCO1 DISCO2

Substation SS1 SS2 SS3

Feeder TR1 TR2 TR1

Sector Ind Res Ind

Customer Class Metal Paper Metal

Slide 4
Demand Forecasting: Bottom Up (Refresh)

System NTDC

Region DISCO1 DISCO2

Substation SS1 SS2 SS1

Feeder TR1 TR2 TR1

Sector Ind Res Ind

Customer Class Metal Paper Metal

Slide 5
Demand Forecasting Methods
• Model Based
• Regression/Econometric
• Timeseries Based
• Trending/Extrapolation
• Similar Day Approach
• Load Research
• Pattern Recognition
• Other
• Expert System (Market Survey)
• End-use
• Hybrid

Slide 6
Techniques for Applying Methods

• Mathematical/Statistical Modelling
• Box–Jenkins, ARIMA, ARIMAX
• Stochastic
• Neural Networks
• Fuzzy Logic
• Artificial Intelligence
• Support Vector Machine

Slide 7
DF Methods – Model Based (Regression)
• Hypothesis: The forecast variable is dependent on
several independent variables
• For example*;
YT = YT-1 * (1+GR of G)b *(1+GR of R)C * (1+GR of L)d *(1+GR of C)e
Where;
Y = Electricity Demand (Sales GWh)
GR = Growth Rate
G, R, L, C = Independent variables (GDP, Real Price, Lag and Customers respectively)
T = Current year or time period
T-1 = Year before current year or time period
b, c, d, e = Elasticities of independent variables. (GDP, Real Price, Lag and Customers)

* Electricity Demand Forecasts based on Multiple Regression, NTDC 2014

Slide 8
DF Methods – Model Based (Regression)
Scenarios and Sensitivity Analysis

• Forecasts are based on causal relationships

• Change in FC of independent variables have effect on DFC
• Uncertainty is addressed through “Scenario and Sensitivity
Analysis”
• FC for independent variables often produced by other agencies
• Variables like GDP and populations are FC as “High, Medium and
Low” growth scenarios
• Demand FC is also produced under such scenarios
• A very large number of possible FC are possible, given large
number of combinations and permutations of idn. variables

Slide 9
DF Methods – Model Based (Regression)
Forecast of Peak Demand (MW) - PEPCO

Slide 10
DF Methods – Model Based (Regression)
Forecast of Peak Demand (MW) – K-Electric

Slide 11
DF Methods – Model Based (Regression)
Forecast of Peak Demand (MW) – System

Slide 12
DF Methods – Model Based (Regression)
Normal Scenario

Slide 13
DF Methods – Model Based (Regression)
Model Reliability

• Reliability of FC is based on how

accurately the model forecasted
“past”
• The known values of
independent variables are fed
into the model, for past years, to
“FC” demand for those years
• FC values for past years are
compared with actual demand
for those years, to establish
“Model Fit”

Slide 14
DF Methods – Model Based (Regression)
• Using causal relationships, estimates new value of dependent
variable for given values of independent variables
• Causal relationships are established based on statistical analysis
on historic data
• Assumes, changes in independent variables largely responsible
for changes in dependent variable
• Ignores effects of other variables, if any
• Forecasts based on forecasted values of ind. variables
• Values of ind. variables mostly not available at lower levels of
network
• Most commonly used to forecasting national level demand

Slide 15
DF Methods – Model Based (Regression)

• Can be used for measuring impacts of weather on demand;

• Used for forecasting “Standardized Average Daily Peak Load”

• Predicts effects of Ambient Temperature and Relative Humidity
(weather effects) on Peak Demand

• Construct a simple regression model

Slide 16
DF Methods – Timeseries

• Forecasts based on pattern in historic data (timeseries data)

• Extrapolate, based on trend/pattern

Slide 17
DF Methods – Timeseries - Trending

• Effects of external variables built into the trend

• Utility specific data is needed/ no external data required
• Assumes trend will continue, Business-As-Usual
• Doesn’t take into account non-BAU (large projects)
• Or rapid change in economic activity, due to external factors
• FC at lowest network level possible, if data is available
• However, aggregation may not be that simple
• Peak demand for different network areas and assets could
happen at different times
• Different timeseries method are available for that 

Slide 18
DF Methods – Simple Trending

Slide 19
DF Methods – Timeseries - Trending
Simple trending can introduce error

Deviations

Slide 20
Timeseries – Trending – Error reduction
Moving Average and Exponential Smoothing

8000
Base Actual Actual/Historic Forecast Future Forecast
7000
Actual (MW)
FC (Trnd Mvng 5Yr)
6000
FC (Trnd All Yr)
FC (ES Mvng 5Yr)
5000 FC (ES AllYr)
Linear (Actual (MW))

4000

3000

2000

1000

0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Slide 21
Timeseries – Trending – Error reduction

Slide 22
Timeseries – Trending – KE Peak Load

Base Actual Actual/Historic Forecast Future Forecast

Slide 23
Timeseries – Trending – KE Peak Load

Slide 24
Timeseries – Trending – NTDC Peak Load

Base Actual Actual/Historic Forecast Future Forecast

Slide 25
Timeseries – Trending – NTDC Peak Load

Slide 26
DF Methods – Dealing with Seasonality
• Actual power demand has 3 dimensions of variations;
• Growth/Trend
• Variation in magnitude
• Seasonality (repetitive cyclic changes)
• Model based forecast generally ONLY address Growth
• Timeseries methods can address all three
• Can forecast growth by months for several years
• “Ripples” in trend (abnormalities) are “dampened” using
“moving averages” or “exponential smoothing”
• Consequently, magnitudes of errors are reduced

Slide 27
DF Methods – Timeseries – FC Seasonality

Slide 28
DF Methods – Timeseries – FC Seasonality
Timeseries PD (MW) Forecast(PD (MW)) Lower Confidence Bound(PD (MW)) Upper Confidence Bound(PD (MW)) Statistic Value
Jan-00 631 Alpha 0.25
Feb-00 592 Beta 0.00
Mar-00 704 Gamma 0.75
Apr-00 909 MASE 0.41
May-00 1131 SMAPE 0.03
Jun-00 1211 MAE 102.37
Jul-00 1382 RMSE 122.61
Aug-00 1381
Nov-16 3197
Dec-16 2804 2804 2804.00 2804.00
Jan-17 2605.257912 2409.74 2800.78
Feb-17 2524.348244 2322.76 2725.93
Mar-17 3001.801272 2794.28 3209.32
Apr-17 3264.246118 3050.91 3477.58
May-17 4269.429883 4050.39 4488.47
Jun-17 4558.844012 4334.20 4783.48
Jul-17 5177.790361 4947.64 5407.94
Aug-17 5138.31746 4902.75 5373.89
Sep-17 4744.500466 4503.59 4985.41
Oct-17 4254.172894 4008.00 4500.35
Nov-17 3397.576987 3146.21 3648.95
Dec-17 2974.574194 2718.08 3231.07
Jan-18 2775.952335 2452.12 3099.78
Feb-18 2695.042667 2367.16 3022.93
Mar-18 3172.495696 2840.57 3504.42
Apr-18 3434.940542 3099.00 3770.88
May-18 4440.124306 4100.18 4780.07

Slide 29
DF Methods – Timeseries – FC Seasonality

Slide 30
DF Methods – Timeseries – FC Seasonality

Slide 31
DF Methods – Timeseries – FC Seasonality

Forecasting
Monthly PD
Vs Monthly
Energy

Slide 32
DF Methods – Timeseries Based

• Conduct Trend Forecasting

Slide 33
DF Methods – Timeseries Based
Scenarios and Sensitivity Analysis

• Forecasts are based on trends (BAU)??

• Causal relationships are embedded in trends
• Uncertainty is addressed manually, based on economic and
policy scenarios
• For example;
• Trend shows annual growth rate of 5%
• However, economic forecasts suggests GDP change from 4% to 6%
annually after year 5
• Adjust trend growth rate to 6.5% after year 5.
• Scenarios are produced using likelihood of implementation of
such special projects that are generally not part of BAU

Slide 34
Trending FC – Pros and Cons

• Simple and straight forward

• Suitable for both Coarse and Finer levels of network
• Does not depend on underlying demand factors e.g. GDP,
population growth etc.
• Assumes these factors are embedded in Business As
Usual (BAU) for future
• Fails to take into account non-BAU situations
• Accuracy erodes with FC >10 years, as BAU changes
• Aggregation requires guestimates (diversification factor)

Slide 35
 Other timeseries methods – Using Model

Auto-Regressive Integrated Moving Average (ARIMA)

Slide 36
Other timeseries methods – Using Model

Typical Assumptions and Modelling Results

Slide 37
Other timeseries methods – Using Model

Comparison of Past Results

Slide 38
Timeseries FC Methods –Load Research

• LR Uses interval energy/demand data to produce 24hr load

profiles under different conditions
• Interval metering now conducted at gen, trans, dist, and
customer levels
• LR provides aggregation and disaggregation of load profiles
by system, distribution areas, substations, feeders, voltage
levels, and customer classes
• LR provides actual estimates of diversity factors, to apply on
FC using trending methods
• LR is used to FC whole day demand profile, rather than just
peak demand or total energy

Slide 39
Timeseries FC Methods –Load Research

Slide 40
Timeseries FC Methods –Load Research

Slide 41
Timeseries FC Methods –Load Research

Slide 42
Timeseries FC Methods –Load Research

Forecast Day = Tuesday 18 July 2017

Slide 43
Timeseries FC Methods –Load Research

Growth

Shape

Slide 44
Timeseries FC Methods –Load Research

Historically
Average
Supply on Tue
July = 134,114
MWh (2008-
2016)

Slide 45
Timeseries FC Methods –Load Research

Normalized LP
Tue July

FC Energy
Supply Tue
July 2017 =
172,000 MWh

Slide 46
Timeseries FC Methods –Load Research

Scaled (FC) LP
Tue 18 July
2017

Scaling Factor
= FC Energy
July 2017 =
172,000 MWh

Slide 47
 Timeseries FC Methods –Load Research

Demand Curves - 2012

600

LR is used for 500

detailed
breakdown by 400
Demand (MW)

Customer Agri
Comm
Class 300
Ind
Public
Resid
200 System

100

0
Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum
of of of of of of of of of of of of of of of of of of of of of of of of
00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00

Slide 48
Timeseries FC Methods –Load Research

Load Research can also be used for LT FC

PD Share Actual Forecast

2012 2013 2014 2017 2020

Residential 58.79% 55.62% 52.46% 49.29% 46.12%

Commercial 11.23% 12.48% 13.73% 14.98% 16.23%
Industrial 20.31% 21.02% 21.73% 22.43% 23.14%
Public 4.83% 4.89% 4.95% 5.01% 5.07%
Agriculture 0.52% 0.44% 0.37% 0.29% 0.21%
Others 4.32% 5.55% 6.78% 8.00% 9.23%

Slide 49
 Timeseries FC Methods –Load Research
Demand Curves - 2012 Forecasted Demand Curves - 2020
600 1200

500 1000

400 800
Demand (MW)

Demand (MW)
Agri Agri
Comm Comm
300 600
Ind Ind
Public Public
Resid Resid
200 System 400 System

100 200

0 0
Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum Sum
of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of of
00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00

Slide 50
DF Methods – Load Research

• Review a Load Research Model System

Slide 51
DF Methods – Load Research
Scenarios and Sensitivity Analysis

• Forecasts are primarily based on historic load profiles, energy

supply and sales, customer numbers and customer bills
• Different scenarios, associated with economy, population,
policy, appliances etc. can be incorporated
• For example;
• Government introduces energy efficiency policy for textile industry,
resulting in decrease in energy consumption per textile account
• Industrial GDP growth = growth in number and energy use for ind
• Government introduces Energy Performance Standards for household
appliances = reduced energy intensity for households starting from year
10x

Slide 52
Timeseries FC Methods –Load Research
Pros and Cons
• LR is a core diagnostic activity
• Provides input to several utility functions, including FC,
planning, tariff design, customer services, DSM
• Great number of system analytics
• WRT Forecasting, it generally forecasts average daily LP,
not very suitable for PD FC
• It provides actual diversity factors
• Although used, not very suitable for spot market
operations (5 min interval trading)
• Unable to address “non-avg” circumstance e.g.
unexpected heat wave

Slide 53
Timeseries Methods – Pattern Recognition

• Attempts to identify patterns in historic data

• Based on similar patterns, establishes probability of very short-term demand

• As such demand forecast is within a band of probability, not an absolute value

Slide 54
Timeseries Methods – Pattern Recognition

4,000

3,500

3,000
?
Demand (MW)

2,500
?
2,000 ?
Today- Actual
1/07/2013
1,500
20/08/2012
13/06/2013
1,000 8/05/2014
15/07/2013
500

-
04:30
04:45
05:00
05:15
05:30
05:45
06:00
06:15
06:30
06:45
07:00
07:15
07:30
07:45
08:00
08:15
08:30
08:45
09:00
09:15
09:30
09:45
10:00
10:15
Slide 55
Timeseries Methods – Pattern Recognition

Days 7:45 8:00

1/07/2013 3.71% 7.71%
20/08/2012 6.39% 5.69%
13/06/2013 6.14% 6.03%
8/05/2014 7.40% 4.71%
15/07/2013 4.58% 10.20%
Today Forecast 5.65% 6.87%

Slide 56
Timeseries Methods – Pattern Recognition
Patter Recognition - Illustration
4,000

3,500

3,000

2,500
Demand (MW)

2,000 Today - Forecast

Today - Actual
1/07/2013
1,500
20/08/2012
13/06/2013
1,000
8/05/2014
15/07/2013
500

-
04:30

04:45

05:00

05:15

05:30

05:45

06:00

06:15

06:30

06:45

07:00

07:15

07:30

07:45

08:00

08:15

08:30

08:45

09:00

09:15

09:30

09:45

10:00

10:15
Slide 57
Timeseries Methods – Pattern Recognition

Patter Recognition - Illustration

3,500

3,000

2,500
Demand (MW)

2,000
Today - Actual
Today - Forecast
1,500

1,000

500

-
04:30

04:45

05:00

05:15

05:30

05:45

06:00

06:15

06:30

06:45

07:00

07:15

07:30

07:45

08:00

08:15

08:30

08:45

09:00

09:15

09:30

09:45

10:00

10:15
Slide 58
Timeseries Methods – Pattern Recognition
Advantages/Disadvantages
• Does not require complex models and associated data
• Can be used at any level where interval demand data is
available (e.g. from customer to wholesale market)
• Requires substantial historic data
• Relatively new technique, no commercial software
available, requires self development
• Suitable for very short DF

Slide 59
Demand FC – Other Methods

• End-use
• Considers customer end information e.g. appliance
penetration and saturation, appliance attributes
• Classic bottom up approach; appliance aggregation to end-
use, end-use aggregation to segment, segment
aggregation to sector, sector to area/substation, to system
• Hugely data intensive
• Not recommended, unless a comprehensive Load
Research activity in place

Slide 60
Demand FC – Other Methods

• Customized Models
• The dynamic nature of power demand is a reflection of
dynamic nature of users
• Householders follow a lifestyle, businesses and industries also
follow certain patterns
• Parameters of power demand (Annual and monthly PD, LF,
energy, time of use of energy) follow these patterns
• Disruption of supply (load shedding) disrupts patterns
• Customized models attempt to capture patterns, based on
history, and forecast demand parameters
• See one such model

Slide 61
Demand FC – Other Methods

• Market Survey (Expert System)

• FC based on opinion of field/industry experts, with
substantial experience
• Considers factors which cannot be incorporated into
model or timeseries analysis e.g. special projects, new
developments
• Although based on history (experience), often intuitive
and not based on evidence
• Because of limitations (associated with human capability
of processing large data), low level of data processing
• Accuracy erodes substantially with duration of forecast

Slide 62
Demand FC – Best Practice

• Establish proper data identification, capturing and maintaining

resources
• When FC errors are found, check the actual and FC values of ind.
variables first, then improve the model
• Use different methods, not just one. Compare and establish the
reasons for differences
• Over time establish reliability of different methods, and focus
and improve on reliable ones
• Maintain focus on evidence based methods (model, timeseries),
use manual adjustments (e.g. based on MS)
• Develop internal resources, rather relying on external.
Partnerships are always good!!

Slide 63